Human Capital Development (HCD) Key Performance Indicators (KPIs) Form “If you cannot measure it, you cannot manage it” Revised: 7th May 2014 SATA 2014 All rights reserved. No part of this form may be reproduced, by any means whatsoever, without the prior written permission of SATA. SATA Key Performance Indicators - KPIs 1 DEFINITIONS 1.1 Key Performance Indicators – KPIs A performance indicator or key performance indicator (KPI) is a measure of performance. Such measures are commonly used to help an organization define and evaluate how successful it is, typically in terms of making progress towards its long-term organizational goals. KPIs can be specified by answering the question, "What is really important to different stakeholders?" KPIs may be monitored using Business Intelligence techniques to assess the present state of the business and to assist in prescribing a course of action. The act of monitoring KPIs in real-time is known as business activity monitoring (BAM). KPIs are frequently used to "value" difficult to measure activities such as the benefits of leadership development, engagement, service, and satisfaction. KPIs are typically tied to an organization's strategy using concepts or techniques such as the Balanced Scorecard. The KPIs differ depending on the nature of the organization and the organization's strategy. They help to evaluate the progress of an organization towards its vision and long-term goals, especially toward difficult to quantify knowledge-based goals. A KPI is a key part of a measurable objective, which is made up of a direction, KPI, benchmark, target, and time frame. For example: "Increase Average Revenue per User from US$ 80 to US$ 100 by end of year 2015". In this case, 'Average Revenue Per User' is the KPI. KPIs should not be confused with a “Critical Success Factor”. For the example above, a critical success factor would be something that needs to be in place to achieve that objective; for example, an attractive new product/service. In the broadest sense, a KPI provides the most important performance information that enables organisations or their stakeholders to understand whether the organisation is on track or not. 1.2 Key Result Areas – KRAs Key Result Areas or Key Responsibility Areas are general areas of outputs or outcomes for which the department / Business Unit is responsible. These areas are the primary responsibilities of an individual, the core areas which each person is accountable for. 1.3 Metrics Metrics is a standard of measurement by which efficiency, performance, progress, or quality of a plan, process, or product can be assessed. “Every company has metrics that track performance. The key question is whether these metrics really provide visibility to performance as viewed by the customer.” (Steve Matthesen, Boston Consulting Group) SATA Key Performance Indicators - KPIs 2 2. KEY PERFORMANCE INDICATORS (KPIs) AND KEY RESULT AREAS (KRAs) In the following Form, please put the necessary values and percentages (%) as indicated. For more clarification, please see Part (Clause) 4 of this Document. No. KEY PERFORMANCE INDICATORS (KPIs) 1. Capacity Building KEY RESULT AREAS (KRAs) Training delivered Training Budget Training effectiveness Training Turnout Rate E-Learning Training Succession Planning 2. Resource Optimisation Savings made Productivity Gain Recruitment METRICS Organization Score Number of people identified for training and who have actually undergone training % of key/critical persons who have undergone training Training & development Budget as a % of Total OPEX Average Training Investment per employee Number of presentations made to colleagues by staff after training % of registered employees who actually turn out for training Number of e-learning courses unitised % of e-learning pass rate Number of people (successors) trained and developed for succession Amount saved on OPEX Ratio of labour costs to revenue Ratio of sales revenue per employee Ratio of indirect labour costs to revenue against budget Average sourcing cost per hire Average time to recruit per position % new hires achieving 12 months service SATA Key Performance Indicators - KPIs 3 HR Efficiency 3. Safety and Health Non Conformance Costing 4. Employee Satisfaction Employee Satisfaction Survey Revenue generated per Full Time Equivalents (FTEs) Administration cost per employee Number of accidents per year % of fatal accidents relative to all accidents per year Number of non-conformance per year Cost of solved safety nonconformance for the month Health and Safety prevention costs within the month % average satisfaction about compensation and benefits % average satisfaction about prospects for growth % average satisfaction about work environment % average satisfaction by supervisors/managers 3. OTHER KEY HUMAN RESOURCES MEASUREMENTS Revenue Factor Human Capital value Added Human Capital ROI Total Compensation Revenue Ratio Labour Cost Revenue Ratio Training Investment Factor Health Care Costs per Employee Turnover Costs Revenue/Total Full Time Equivalent (FTE) (Revenue – Operating Expenses – Compensation & Benefit Cost)/Total FTE (Revenue – Operating Expenses – Compensation & Benefit Cost)/Compensation & Benefit Cost Organisation Score Compensation & Benefits Cost/Revenue Total Labour Costs (Compensation & Benefit Cost + Other Personnel Cost)/Revenue Total Training Cost/Headcount Total Health Care Costs/Total Employees Termination Costs + Hiring Costs + Training Costs + Other Costs SATA Key Performance Indicators - KPIs 4 4. DETAILED HUMAN CAPITAL DEVELOPMENT (HCD/HR) KPIs The details below are meant to help in filling the above HR Form. This Part 4 of the Form is therefore not expected to be returned to the SATA Secretariat. 4.1 Recruitment Key performance Indicator Recruitment key performance indicators (KPI) is a part of Human Resources KPI include KPI as follows: 4.1.1 Recruitment costing KPI Recruitment costing per position. Recruitment costing per position per channel Average sourcing cost per hire Average sourcing cost per hire. Sourcing costs include advertising, referral and agency 4.1.2 Recruitment time KPI Average time to recruit. Calculating from date of recruitment require to date of employee hired. Average time to recruit per position. 4.1.3 Recruitment source KPI Number of CVs / per channel Recruitment source ratio. Ratio between internal versus external recruits. 4.1.4 Selection KPI Average number of interviews from submitted resumes. Track the number of converted submitted resumes to interviews. Number of qualified candidate compared to resumes. 4.1.5 Recruitment efficiency KPI 4.2 % recruitment achievement meet hiring plan % new hires achieving 6 months service % new hires achieving 12 months service % new hires achieving satisfactory appraisal at first assessment Training Key Performance Indicators 4.2.1 Training Cost KPI Company training expenditure (% of salaries and wages) SATA Key Performance Indicators - KPIs 5 4.2.2 Training Hours KPI Average number of training hours per employee 4.2.3 Training Certificates KPI Number of employees completing sponsored MBA programs 4.2.4 Training Courses KPI Number of courses offered Number of courses implemented. 4.2.5 Training Satisfaction KPI Employee satisfaction with training. 4.2.6 Training Budget KPI % of HR budget spent on training Average training costs per employee 4.2.7 Training Results KPI % of employees gone through training Average time to competence. That is average time it takes until expected competence level is reached. % & employee reach competence after training. 4.2.8 Training Penetration Rate KPI It measures the percentage of employees completing a course compared to total number of employees employed. 4.2.9 E-Learning Training KPI e-learning courses utilized % of e-learning pass rate 4.3 Health and Safety KPI 4.3.1 Health and safety non-conformance KPI Number of non-conformance per year / quarter Number of accidents per year Number of reportable accidents year Number of reportable non-fatal accidents per year SATA Key Performance Indicators - KPIs 6 Number of solved safety non-conformance for the month Percentage of corrective actions closed out within specified time-frame Percentage of fatal accidents relative to all accidents per year. 4.3.2 Health and safety training KPI Percentage of staff with adequate occupational health and safety training Total of hours in safety and health training in the month. 4.3.3 Health and safety representatives KPI Percentage of staff with adequate occupational health and safety training Total of hours in safety and health training in the month. 4.3.4 Health and safety costing KPI Cost of solved safety non-conformance for the month Health and safety prevention costs within the month. 4.3.5 Health and safety results KPI Lost time (in hours) due to non-fatal accidents per year Lost time (in hours) due to accidents (including fatalities) per year. 4.4 Performance KPI What is the difference between competence appraisal and performance appraisal? Competence focus on capability that include knowledge, abilities, skills to perform tasks Performance focus on result of tasks. Performance KPI includes: 4.4.1 4.4.2 4.4.3 4.4.4 4.4.5 4.4.6 4.4.7 % of appraisals completed on time % of employees above competence % of employees below competence % of low performing employees % of high performing employees % of employee with their performance decreased compared to last month % of employee with their performance increased compared to last month 4.5 Employee Loyalty KPI 4.5.1 Employee turnover KPI Employee turnover = total staff as recruited / total staff as planned SATA Key Performance Indicators - KPIs 7 The rate of this measure can rate the company’s rate, one division or the rate at each position. 4.5.2 Average tenure per employee KPI The rate of life cycles of employees = total time served in enterprises of all staff/total staff recruited This rate can be done by company or department. 4.5.3 Average time employees are in same job/function KPI The rate of life cycles of employees = total time served in enterprises of each position/total staff recruited. 4.6 Working Time KPI Working time KPI includes: 4.6.1 % of total hours lost to absenteeism 4.6.2 Average overtime hours per person Low number is indicator or proper scheduling and reduce opportunity of human fatigue related events 4.6.3 4.6.4 4.6.5 % of man days lost due to strike Total time lost by work late This rate can be used by company or department. Lost time due to non-fatal accidents or accidents per year This rate can be used by company or department. 4.7 Employee Satisfaction KPI Employee satisfaction KPI includes: 4.7.1 4.7.2 4.7.3 % Average satisfaction % Average satisfaction by each department % Average satisfaction by field such as: Attitude about compensation and benefits Attitude about promotions, training. Attitude about work tasks Attitude about co-workers Attitude about supervisors/managers. 4.7.4 % Average satisfaction by new employee. SATA Key Performance Indicators - KPIs 8 4.8 Job Leaving KPI Job leaving KPI includes: 4.8.1 4.8.2 4.8.3 4.8.4 4.8.5 Job leaving ratio per year Job leaving ratio per department Average age of employees that retire Percentage of early retirements Attitude of employee who leave job: Satisfaction ratio with wages/salary/benefits Satisfaction ratio with conditions/physical work environment Satisfaction ratio with job Satisfaction ratio with personal relations Satisfaction ratio with participation and recognition Satisfaction ratio with opportunities for development Number of employees who would seek re-employment with company 4.9 Workforce Information KPI Workforce information KPI includes: 4.9.1 4.9.2 4.9.3 4.9.4 4.9.5 4.9.6 4.9.7 4.9.8 4.9.9 4.9.10 4.9.11 4.9.12 4.9.13 4.9.14 Number of FTEs in HR HR FTEs as % of total workforce (FTEs) Percentage of outstanding employee probation reports Number of Full Time Employees Number of Part Time Employees Number of employees aged under 25 Number of employees aged 25–35 Number of employees aged 35–45 Number of employees aged 45–55 Number of employees aged over 55 Average length of service (current employees) Average length of service (terminating employees) % ratio of salaried staff to waged staff % ratio of surplus SATA Key Performance Indicators - KPIs 9